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Devinder Sharma

For a country whose agricultural fortunes are uncertain because of a combination of factors, resurrecting the sagging morale of the farming community is most important. After all, whether it be maize, paddy, pulses, oilseeds or even plantation crops, agriculture is plagued by the collapse of what used to be an assured market.

THERE appears to be something wrong with India's economic thinking. The more-than-warranted emphasis on exports, especially since the launching of economic reforms, saw the state offering sops to trade, business and industry. But industry failed to deliver. And now, the focus has shifted to agriculture.

While unveiling the Exim Policy for 2002-07, the Commerce Minister, Mr Murasoli Maran, said it would take care of more than 80 per cent of the population living in the rural areas, by focussing on the agriculture, cottage and handicraft, and small-scale sectors.

In the 2002-03 Budget, the Finance Minister, Mr Yashwant Sinha's prescription for reforming agriculture and ensuring freedom to the farmer — kisan ki azadi — would only result in economic freedom for the middlemen.

While Mr Sinha's Budget would see the exploitation of the gullible and hapless farmers at the hands of middlemen, Mr Maran's Exim Policy would further strengthen this process.

Handing out to agriculture the same policy prescriptions applied earlier to industry would only exacerbate the crisis on the farm front. Both the Budget and the Exim Policy will surely spell the beginning of the end of Indian agriculture.

The Exim Policy — prepared based on numerous reports and analyses by the National Council of Applied Economic Research (NCAER), the Centre for Monitoring of Indian Economy (CMIE) and the Indian Institute of Foreign Trade (IIFT) for the Commerce Ministry — suffers from a faulty premise: It treats agriculture merely as an export earner, overlooking the harsh ground reality — of the plight of millions of resource-poor farmers who toil hard to make ends meet.

The expectations of the Commerce and Agriculture Ministries following the opening up of world trade have been belied.

The hopes on the Exim Policy, too, may come to that. It is, therefore, important to find out why. Corrective measures must be taken to ensure that the country does not become a victim of economic miscalculations.

For a country whose agricultural fortunes are uncertain because of a combination of factors, resurrecting the sagging morale of the farming community is most important.

After all, whether it be maize, paddy, pulses, oilseeds or even plantation crops, agriculture is plagued by the collapse of what used to be an assured market.

With hundreds of farmers committing suicides to escape from the humiliation that comes with mounting indebtedness and with tens of thousands of them writhing under the terrible impact of the sudden crash in prices, any talk of boosting the export potential is fraught with dangers.

Ignoring the plight of the poor farmers apart, the Exim Policy would only create another class of export-oriented rich `farmers'.

Again, a majority of those who eventually reap the benefits of the state's patronage to exporters would not, in a strict sense, be farmers. The neo-class farmers, like those involved in cut-flower exports, eventually turn out to be businessmen who are keen to make a fast buck.

The Exim Policy will further widen the gulf between the `rich' and the poor farmers.

The Policy, apart from providing transport subsidies for exporters, talks of improving up the infrastructure required for developing horticultural processing and exports, developing export promotion zones (EPZs) for export-oriented crops, including fruits and vegetables, and building up a farmers' export consortium.

These investments and subsidies, including those provided for biotechnology (the `sunrise' industry), can easily be brought under the "Green Box" of the WTO — that is, they need not be reduced under the subsidies reduction commitments.

Remember the fate of industrial estates that were set up in the early 1970s?

A majority of those which utilised the benefit of cheap land and other resources soon disappeared, by selling off the industrial plots and sheds.

The EPZs for agriculture, too, will meet with the same fate. In any case, the Government must accept the fact that farmers cannot get into exporting food or other processed foods.

Only recession-hit businesses and industries will be enthused to exploit the subsidies and milk the farm sector dry. This raises a fundamental question: Is the Government trying to increase agricultural exports without considering the implications for the farm sector?

If yes, this could see the emergence of a class of `businessmen farmers' and a further isolation of the huge populace of small and marginal farmers.

The Commerce Ministry, by encouraging the growth of cash crops and exports, is rendering the agrarian sector vulnerable to cheaper and highly subsidised foodgrain imports.

At this juncture, what is important is revitalising the crisis-ridden sector.

A few cosmetic initiatives are certainly not going to restore the confidence of farmers.

The Ministry must prepare a blueprint that aims at strengthening the farm sector by building up a procurement system owned and operated by the state, and providing farmers an assured and remunerative price for their produce.

Else, there will be no real incentive for the cultivators to produce more.

Instead of squandering away taxpayers' money on a section of the exporters, the emphasis must be on turning the tide for the millions of small and marginal farmers.

Once the backbone of the farming community is strengthened, there need be little fear of the market forces or the World Trade Organisation. But this requires vision on the part of the policymakers, which unfortunately is lacking.

And, for obvious reasons, they are embarking on a free market exercise to the detriment of the masses.

(The author is a food and trade policy analyst. Responses can be e-mailed at: dsharma@ ndf.vsnl.net.in)

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